10 best cities for millennials to buy a home

Slow job growth and student debt have made it harder for first-time home buyers

Typically, first-time buyers account for roughly 40% of all home sales; today they account for 28%, according to Lawrence Yun, chief economist for the National Association of Realtors. The reason: Slow job growth is making it harder for young would-be buyers to find good paying jobs, student debt load can be stifling and it’s harder for young buyers to meet today’s underwriting standards required to get a mortgage, he said.

Yun thinks it will be about three years before the share of first-time buyers returns to normal. But in some markets over others, the oldest millennials (those between the ages of 25 and 34) may have a better chance of becoming homeowners in the near future. Using data including the local population of people this age, job market conditions, housing affordability and inventory, NAR analyzed 100 metropolitan areas to find the best markets for those older millennials interested in becoming homeowners. —Amy Hoak

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Austin, Texas

This area boasts a large number of millennials between the ages of 25 and 34; the group made up 17.3% of the population between 2010 and 2012. Also, job growth is strong here, with a 4.2% job growth rate for private payroll jobs between May 2013 and May 2014.

Median home-price growth from 2012 to 2013: 8.2%

NAR affordability index reading for 2013: 177.3 (A value of 100 means a family with the median income in the area has enough income to qualify for a mortgage on a median-priced home; the higher the index reading, the more affordable the area.)

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Dallas

Elsewhere in Texas, millennials are settling in the Dallas-Fort Worth-Arlington area, where private sector job growth was up 3.9% over the year ending in May. Millennials between the ages of 25 and 34 made up a 15.1% share of the population between 2010 and 2012.

Median home-price growth from 2012 to 2013: 10.2%

NAR affordability index reading for 2013: 206.2

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Denver

Many millennials between 25 and 34 have been moving to Denver. The share of these millennial movers (compared with movers of any age) was 29.2% between 2010 and 2012, according to the report. Private sector job growth in Denver was 2.7% between May 2013 and May 2014.

Median home-price growth from 2012 to 2013: 11.2%

NAR affordability index reading for 2013: 146.6

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Des Moines, Iowa

The share of movers in the 25-to-34 age group was 29.0% between 2010 and 2012. Private sector job growth was 3% between May 2013 and May 2014. Des Moines also ranks high on the affordability index.

Median home-price growth from 2012 to 2013: 7.4%

NAR affordability index reading for 2013: 225.5

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Grand Rapids, Mich.

Job growth is strong in this area, with a 4.2% increase in private payroll jobs for the year ending in May, according to the report. Grand Rapids has the highest affordability reading on the list.

Median home-price growth from 2012 to 2013: 14.3%

NAR affordability index reading for 2013: 256.6

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Minneapolis

For the year ending in May, for-sale inventory grew 64% in this area, which also includes St. Paul and Bloomington. The share of millennial movers was 26.7% between 2010 and 2012.

Median home-price growth from 2012 to 2013: 14.2%

NAR affordability index reading for 2013: 227.0

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New Orleans

The unemployment rate has been improving in New Orleans; it was 4.8% between January and May. And the share of millennial movers between 25 and 34 was 25.6% between 2010 and 2012.

Median home-price growth from 2012 to 2013: 5.4%

NAR affordability index reading for 2013: 187.6

Scott Catron from Sandy, Utah, USA/Wikipedia

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Ogden, Utah

Unemployment is only 4% in the Ogden-Clearfield area, and the inventory of homes has risen 19% between May 2013 and May 2014.

Median home-price growth from 2012 to 2013: 8.6%

NAR affordability index reading for 2013: 207.6

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Salt Lake City

Millennials between the ages of 25 and 34 made up a 17.2% share of the population between 2010 and 2012. The area also has the lowest unemployment rate on this list at 3.8%.

Median home-price growth from 2012 to 2013: 12.7%

NAR affordability index reading for 2013: 161.0

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Seattle

Inventory is on the rise in Seattle, where the number of homes for sale is up 13% between May 2013 and May 2014. It’s also a city many people between the ages of 25 and 34 have been moving to; the share of movers that age was 28.1% between 2010 and 2012.

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